Aurora Magazine

Promoting excellence in advertising

Published in Mar-Apr 2012

3G too soon?

As Pakistan gears up for 3G, Yasmin Malik questions the wisdom of the timing.

I first got a taste of what cellular 3G is supposed to be in 2003. The service (high-speed cellular broadband access) was being introduced on a commercial basis in the UK by Three which was taking the first firm steps on its journey as a 3G network. At the time, only one handset by Motorola was on offer by Three to avail the service.

Despite the handset being clunky and difficult to use, the service very expensive, and a lot of ignorance by the general public as to what 3G was supposed to be exactly, I was among many enticed by Three to take up the service. I cite the example because Three’s focused marketing at the time was so effective in sweeping aside misconceptions and unknowns about this new and hyped up third generation telecom service that it carved a smoother path to follow for other operators offering 3G. Today Three owns a network that boasts a traffic rate that is 97% data. In fact, in the 14 months between June 2010 and September 2011, Three saw a 427% increase in data usage for its smartphone customers.

Here in Pakistan, we now stand quite close to the same threshold as UK consumers did about a decade ago. Close because the 3G license auction process has finally been officially announced by the Pakistan Telecommunication Authority (PTA) for the end of March and laid to rest all the debate on ‘will we or won’t we.’

According to the PTA, three technology neutral, next-generation (i.e. 3G/4G/LTE) licenses in the 1900/2100 MHz frequency band will be up for auction; all the five existing MNOs in Pakistan will be eligible to bid and international operators will also be allowed to participate. A pre-determined and steep opening bid price of $210 million has been announced which has cleared some of the air of uncertainty associated with the auction, as there was much debate and speculation about what the base price would be. The PTA stipulates, however, that during the auction, bidders will be expected to “increase their bids by a minimum of two million dollars and a maximum of $10 million” in each bidding round.

All this bodes well for the PTA and the government in terms of expected revenue generation, but leaves the MNOs in a highly unenviable position. Since only three licenses are on offer, and assuming that there will be no outside bidders, a local telecom market with three next generation license holders and two GSM providers will emerge. Parallels with Instaphone and Paktel’s demise, which lost out on account of being AMPS operators versus GSM operators due to similar restrictions, are undeniable.


#### As Pakistan gears up for 3G, Yasmin Malik questions the wisdom of the timing.

In my view, this auction has come too soon for many a wrong reason. Even though the long term vision for Pakistan’s telecom market should definitely include next generation technologies, we must not lose sight of the fact that currently MNOs are still not reaping the benefits from second generation (2G-based) technologies such as GPRS/EDGE. 3G promises increased mobile bandwidth so that we can browse the mobile internet, view streaming video, use Google Maps on the go and get our social networking fix in the required dose and overall become more data-centric in the way that we use our mobile phones. However, we are already capable of doing all the aforementioned activities quite adequately via the existing GPRS/EDGE networks.

Realistically and alarmingly, uptake of GPRS/EDGE remains at hardly five percent of the total mobile subscriber population in Pakistan (ProPakistani). This is not an encouraging statistic for operators who have invested heavily in GPRS/EDGE networks in order to derive long term revenue via data-driven revenue streams as an alternative to the highly lucrative voice revenues.

In my view, the 3G auction is forcing operators to invest further in upgrading their infrastructure to offer a new technology while their previous data-centred infrastructure investment has not reached optimum levels. Without serious help from the government, which at the moment seems wholly focused on quickly filling its coffers and reducing peer pressure from recent regional 3G roll-outs in India and China, 3G uptake by the general public will remain a huge marketing and operational challenge even with the extended implementation date of March 2013 under the term of the auction. The PTA would have been well advised to delay the license auction until at least that date.

One way in which the government can positively impact the uptake of 3G is to take some notes from the Indian government which recently announced plans for all its departments to adopt and deploy mobile applications in order to “make public services more accessible to the public”. This is coupled with a vision to make all government department websites mobile compliant.

It remains to be seen what steps the operators will take in getting the government to play a more proactive role in facilitating the uptake of 3G services. None of the operators I contacted for their point of view were willing to comment at this pre-auction stage. Understandably, all MNOs are playing their cards safely with regard to their media image prior to the auction, while being careful to not publicly display the dilemma they are in.

Mobilink, in particular, has been the first MNO to re-awaken its somewhat dormant media image by announcing its intention to bid for the 3G license and presenting its strategy for 2012. Both Telenor and Ufone have been known to be engaged in 3G technical readiness initiatives with 3G equipment vendors over the last two years and are likely to be strong contenders for the auction.

With all the hype generated by the coming of cellular 3G, we have forgotten that we do have fully functional 3G networks already in Pakistan. WiMAX (wireless broadband) offered by, Mobilink Infinity, Qubee, Wateen, Wi-tribe and the EV-DO wireless broadband service as offered by PTCL are successfully serving many of our metropolitan cities. The service is not wholly restricted to those with laptops, iPads, tablets or PCs, however. Mobile users with Wi-Fi enabled phones (and there are many) can and do easily tap into these networks for high-capacity mobile internet usage.

However, the road to what now seems fairly adequate and affordable 3G broadband wireless access has not been easy. Wateen, which pioneered WiMAX services in Pakistan in 2007, in particular has learnt hard lessons from a premature and aggressively marketed nationwide network roll-out of a service that was driven more by the vendor’s interest (Motorola) while it grossly miscalculated on the uptake of the general public which remained dismal in the early years.

Qubee and Wi-tribe have strategised better and kept their initial focus on urban areas with higher demand and awareness while at the same time admirably demystifying 3G as an everyday broadband wireless service with smart, down-to-earth and hence effective marketing campaigns.

Let us hope that the cellular companies will be equally smartly focused with their 3G network offerings.

Yasmin Malik is associated with the UK’s Informa Telecoms & Media. yasminmalik1@yahoo.com